Changes in Auto Insurance

August 6, 2026

The Province of Ontario operates in a hybrid auto insurance system. On one hand, the tort system provides individuals with the opportunity to claim legal compensation against an at-fault party if they are injured in a motor vehicle accident. On the other hand, the Statutory Accident Benefits Schedule governs accident benefit claims. It is mandated by the government and provides no-fault benefits in the event of an auto accident. Since September 1, 2010 (Ontario Regulation 34/10), standard auto insurance policies contained certain mandatory benefits, including[1]:

1. Medical and Rehabilitation Treatment
2. Attendant Care
3. Income Replacement Benefits
4. Non-Earner Benefits
5. Lost Educational Expenses
6. Expenses of Visitors
7. Damage to Clothing, Glasses, Hearing Aids, etc.
8. Death Benefits
9. Funeral Benefits
10. Caregiver Benefits (Only mandatory for catastrophic impairment category, otherwise optional)
11. Housekeeping and Home Maintenance (Only mandatory for catastrophic impairment category, otherwise optional)

However, effective July 1, 2026 (Ontario Regulation 383/24), only Medical, Rehabilitation, and Attendant Care benefits will remain mandatory.[2] While the other benefits will still be available, they will become optional and only available for an additional fee.

Furthermore, the changes will also reduce the number of individuals eligible to claim these benefits under a standard policy. In the past, benefits commonly extended to eligible claimants under the no-fault system, including cyclists and pedestrians. However, the now-optional benefits (No. 3 – No. 11 on the list above) will be only applicable to the following individual(s):

1. The named insured
2. The spouse of the named insured
3. Dependants of the named insured and their spouse
4. Those specified as drivers of the insured vehicle in the policy

What Impact Could These Changes Have on You?

The sweeping changes will force consumers to balance short-term financial relief and long-term protection. Although a policy can likely be changed at any time, you will not be able to retroactively add more coverage and protections with respect to a specific motor vehicle accident once it occurs.

The optional system may also disproportionately impact certain groups in society who do not have access to income replacement or long-term disability coverage through their employment. Without the minimum income replacement benefits previously available, some consumers may find themselves in a difficult financial position should an accident occur, resulting in their inability to work.

Pedestrians and cyclists without access to their own auto policy will also be limited in the benefits available to them if struck by a motor vehicle.

Although everyone’s situation is different, there is a chance that the potential short-term savings of a reduced policy may be minimal compared to being underinsured in the event of a serious motor vehicle accident.

Who do these changes apply to?

The auto insurance changes will impact Ontario drivers looking to either purchase a new policy or renew an existing one on or after July 1, 2026.

For those looking to purchase a new policy, you will still have the opportunity to access minimum Medical, Rehabilitation, and Attendant Care benefits. However, should further coverage be desired, you will need to opt-in to the now-optional benefits at the time of purchase to ensure they are included in your plan from day one.

For those looking to renew an existing policy, you will have various options available at the time of renewal. If you are satisfied with the current state of your policy, you will have the ability to continue with the coverage you previously held. Alternatively, if you want to reduce the number of benefits and the cost of your policy, this intention must be communicated “in writing” to your insurance company or broker.[3]

The manner in which insurance companies will interpret these new changes will likely vary. For example, some companies may interpret “in writing” as an express letter or email while others may consider a mere response, acknowledgement, or reaction sufficient to satisfy the wording of the legislation. As a result, it is important to check with your insurer and/or broker to learn how they are handling these changes. Whichever policy option is best for you, it is essential that you fully understand your situation to ensure you are in the best possible position, now and in the future, should a motor vehicle accident occur.

For more information about these changes, the link attached will direct you to a video by the Ontario Trial Lawyers Association: Ontario Auto Insurance Changes 2026: What Drivers Need to Know Before Benefits Become Optional.

Blog post written by 1L Summer Student Josh Gillesby

[1] Statutory Accident Benefits Schedule – Effective September 1, 2010, O Reg 34/10.

[2] Statutory Accident Benefits Schedule – Effective September 1, 2010, O Reg 383/24.

[3] Ibid.